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DEPT OF PUBLIC ENTERPRISES

EMPOWERMENT

PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC ENTERPRISES

23 AUGUST 2006

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Content

• Guiding principles and legislative imperatives

• DPE’s strategic intent

• Transformation in DPE

• Women in SOE boards

• Transformation in SOE– Eskom– Alexkor– Denel– Safcol– SAA– Transnet

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Guiding principles and legislative imperativesLegislation

ConstitutionPublic sector Preferential Procurement ActBlack Economic Empowerment Act of 2003

Skills Development ActEmployment Equity Act

King II

LeverQuarterly and Annual Reporting

Shareholder Compacts Corporate PlansKPIs and Targets

SOEs PoliciesSocial Responsibility

Eskom, DenelTransnet, Safcol

AlexkorSAA

PBMR Social Empowerment Economic Empowerment  

Drivers

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DPE’s strategic intent

• Gender empowerment fundamental hence it is fully integrated into the activities and structure of DPE

• In respect of SOE we facilitate equity transformation through:– Directing the strategic direction of SOEs on Transformation – Board Appointments– Signing of annual Shareholder Compacts– Monitoring implementation of national policy of gender equity and BEE– Setting of KPIs through Corporate Plans – Quarterly and annual reporting

• With regard to our own programmes, the Properties sub-programme of the Joint Project Facility Unit contributes directly to Broad-based Black Economic Empowerment (presentation to follow)

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Transformation - DPE

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Transformation - DPE

GENDER EQUITY

38%

62%

MALE FEMALE

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Women in SOE Boards 2002 - 2006

024

68

2002 Female

2004 Female

2006 Female

Still a challenge to secure women board members but we are working towards 50%

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Transformation - Eskom

Gender Development Framework

Diversity Procedure

Sexual harassmentFlexi-time PolicyMentorship Policy

Workforce

AA PolicyGender PolicyDisability

Suppliers

•Black suppliers•W.O. B•PWD

•Diverse customers•Penetrating new markets•Community – Esdef

Customers

DirectivesTalent ManagementJob enrichment & rotationInternational exposureCoachingWorklife programmesWomen networking forum

Programmes

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Transformation - Eskom

0%

5%

10%

15%

20%

25%

30%

2006 2005 2003 2001 1999 1997

African Female

Asian Female

Coloured Female

White Female

Total

14 %9 % 1 %1 %4 %1997

25 % 8 %2 %1,5 %13,5 %2006

TotalWhitesColouredAsianAfricanYear

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Transformation – Eskom (F Band)

0%

5%

10%

15%

20%

25%

30%

35%

2006 2005 2003 2001 1999 1997

African Female

Asian Female

Coloured Female

White Female

Total

13%8 % 1 %1 %3 %1997

32 % 8 %3 %2 %19%2006

TotalWhitesColouredAsianAfricanYear

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Empowerment programmes - Eskom

• Management processes in place– Targets

• Current and future to create clear understanding of long-term objective (intent)

– Employee satisfaction surveys– Leadership effectiveness measurements– Structured learning programmes supported by formalised

mentorship and coaching– Monitoring trends

• Staff turnover• Salary scales• Performance assessments• EAP

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Empowerment programmes - Eskom

• Work/life examples

– Appropriate flexibility of working hours– Child-care facilities– Tolerance of diversity

• Female roles (religion, home, social, business)• Workplace logistics (safety clothing, bathroom

facilities)• Ergonomics (heights, heavy equipment)

• Health and wellness

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Empowerment programmes - Eskom

• Universities– total:532 – women 66,5%

• Technikons– total: 301– women 77%

• Technical Colleges– total: 206– women 74%

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Preferential procurement - Eskom

Eskom development foundation• Fund targets projects driven by women, persons with disability and

for poverty alleviation

Total BEE BWO Included*Target Without Coal 10,918,449.0 1,695,753.0

Coal 3,839,000.0

TOTAL 14,757,449.0 1,695,753.0

* 18% of the BEE Target

2005-2006 Expenditure

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Transformation – Alexkor

The vision of Alexkor Limited with respect to black economic empowerment and women empowerment is to:

•Employment Equity

•Ensure procurement of 25% from HDSA sources increasing in future years

•To focus on female empowerment to build capacity building for meaningful female participation in the local and mainstream economy

This is in line with the BBSEE Charter for the South African Mining Industry

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Transformation – Alexkor

Equity breakdown Target for 2006/07 Actual as at 31/03/06African 6% 6%Male 25 23Female 2 1Indian 0% 0%Male 0 0Female 0 0Coloured 73% 72%Male 250 231Female 78 67White 21% 22%Male 72 66Female 25 24Total 452 412Disabilities 0 0

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Transformation – Alexkor

OCCUPATIONAL LEVELNUMBER OF

INCUMBENTS AM CM WM AF CF WF% OF DESIGNATED

GROUPTop Management 2 2 100%Senior Management 5 1 3 1 40%Professionally Qualified 14 3 2 5 1 1 2 64%Skilled 74 25 38 3 8 49%Semi Skilled 212 7 141 20 30 14 91%Unskilled 105 11 62 32 100%TOTAL 412 23 231 66 1 67 24 84%

MALE FEMALE

EMPLOYMENT EQUITY AS AT 31 MARCH 2006

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Empowerment programmes – Alexkor

The following programmes are in place for women empowerment and to address employment equity ratios

•Awarding and participation of women in shallow water and sea concession contracts

•Allocation of bursaries in mining related disciplines

•Placement of females on mentorship programmes

•Employment of females on learnerships in engineering trades

•Training of females as earth moving operators

Preferential procurement; Of the R165.5 m spent in the 2005/2006 financial year, 55 % was directed towards small, medium and micro enterprises, BEE’s and women owned enterprises

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Transformation - Denel1. Historical legacy of Denel

• Captured market – South African Defence Force

• White, male dominated

• Very few women in engineering – primarily secretarial, administration and support

2. Denel is committed to the development of historically disadvantaged individuals and women in particular to address historical biases

3. Denel has commenced with an organisational culture/climate survey in conjunction with Consulting Company Absolute Ndaba aimed at assessing current culture in respect of all facets of transformation within Denel. On conclusion of the survey, the results obtained will be used to develop strategies as well as an equity vision for Denel. The survey results will be available during October 2006.

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Transformation - Denel

African Coloured Indian White African Coloured Indian White

Legislators, senior officials & managers 52 24 6 276 30 8 0 19 415

Professionals 64 8 41 615 18 2 6 69 823

Technicians & associateprofessionals 140 62 23 1013 27 12 3 106 1386

Clerks 165 61 5 106 111 77 15 342 882

Service & sales workers 94 75 0 71 31 15 1 9 296

Skilled agricultural & fisheriesworkers 0 0 0 0 0 0 0 0 0

Craft & related tradesworkers 214 146 5 750 45 12 1 12 1185

Plant & machine operators& assemblers 897 417 2 89 235 358 1 60 2059

Elementary occupations 190 9 4 17 90 13 1 1 325

Total Permanent 1816 802 86 2937 587 497 28 618 7371

Non-permanent employees 316 122 2 148 130 93 2 39 852

Total 2132 924 88 3085 717 590 30 657 8223

Male FemaleOccupational Categories Total

Total number of employees per Occupational Categories as at 30 September 2005

Percentage 26 11 1 37.5 9 7.1 0.4 8

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Transformation - Denel

24%

76%

Females

Males

Gender equity

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Empowerment programmes - Denel•Centre for Learning and Development:

•The School of Business Leadership

•The School of Aerospace

•The School of Land Systems

•The Denel Youth Foundation Training Programme

•Skills Development Projects:

•Through eight sector education and training authorities

•Focus on Engineers, Scientists and Technicians

•External training within South Africa & Abroad

•External training in Nepad countries

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Preferential procurement - DenelFinancial

period2001/2 2002/3 2003/4 2004/5 2005/6

Total Spend (Rm)

1,463 1,185 1,397 1,985 1,794

BBBEE 166.211 251.068 201.929 437.060 334.276

% 11.36% 21.19% 14.45% 22.02% 18.6%

Women (Rm)

Direct 17.260

Indirect 2.874

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Transformation – Safcol

The SAFCOL Group is committed to supporting the policies and initiatives of Government. Black economic empowerment and the development of the second economy are key focuses. The following activities demonstrate the Group’s initiatives :-

• The disposal of SAFCOL’s subsidiaries and other businesses to third parties consisting of a share of BEE interests in line with Government policy.

• BEE is one of the criteria taken into account in the procurement policy of SAFCOL for services and products, and the sale of raw timber to processors.

• Funding earmarked for corporate social investment is spent on rural development and the upliftment of individuals and communities.

• The involvement of SAFCOL in the development of the BBBEE Forestry Charter. • The increased impetus to implement employee share option plans in disposed

subsidiaries.

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Transformation – Safcol

Disabled *

T A T A T A T AMale 6 9 5 2 11 11 0

Female 2 1 2 0 4 1 0Male 6 7 5 2 11 9 0

Female 2 1 3 0 5 1 0Male 30 39 18 9 48 48 0

Female 6 4 6 1 12 5 0Male 32 34 36 31 68 65 0

Female 12 11 6 2 18 13 0Male 3 1 35 33 38 34 5 *

Female 32 32 16 14 48 46 0Male 10 3 1700 1334 1710 1337 0

Female 0 0 500 236 500 236 0TOTAL 141 142 2332 1664 2473 1806 2473 1806 5 *

* Already included in total

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HDI Subtotal Group

Note: Target indicate levels that should have been reached at this stage to be able to comply with numerical goals by 2008

Top Management (F & E-Band)

WhiteLevelsMale / Female

Production Workers

80

1573

Senior Management (Upper D)

Middle Management (Lower D)

Techinical and Administrative Officers (C-Band)

Administrative (B-Band)

PERMANENT EMPLOYEES AS AT 31 JULY 2006

Sub-totalTotal

T = TargetA = Actual

86

86

2210

16

15

60

12

10

53

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Transformation – Safcol

The organisation, because of its nature, is primarily male dominated with 83% of employees being male and 17% being female

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Empowerment programmes – SafcolAn in-house training centre provides skills training to own employees as well as externally. The training is to the benefit of historical disadvantaged individuals and contractors. Annual training includes in excess of 4 600 people involving more than 12 000 person days.

Auditing, mentoring and assistance are provided for emerging contractors (SMME’s).

Bursaries are granted to employees, dependants and historically disadvantaged individuals to obtain academic qualifications. Current budget amounts to R1,3 million. A total of 35 current bursaries are being sponsored of which 24 are for historically disadvantaged individuals and females.

Bridging classes and experiential training provided for candidates in respect of a variety of disciplines (scarce skills) e.g. :- •Forestry 21 Candidates•Artisans 8 Candidates•Administrative 9 Candidates•Marketing 3 Candidates•Wood Technology 2 Candidates

ABET classes in progress at is centres to improve literacy levels. Current attendance is 376 learners. IEB exams (2005/6) Level 4 180 passed

Level 1 – 3 205 passed.

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Preferential procurement – Safcol

The percentage spent on procurement of forestry and related service contracts in respect of BEE and SMME’s are as follows :- Table 1 : Black Owned contracts with Equity ownership in excess of 50%

Percentage Rand value Target Actual

Capital intensive Contracts 40% 32% Labour intensive Contracts 80% 48%

Table 2: Contracts with Equity ownership of between 20% and 50%

Percentage Rand value Target Actual

Capital intensive Contracts 40% 45% Labour intensive Contracts 80% 95%

In addition to the above the Group’s main providers of goods and services are Eskom, Telkom and the major fuel companies. They all are BEE Compliant.

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Transformation - SAA

South African Airways is in the process of redefining its core business and revising its corporate plan

Empowerment has always been a fundamental component of the SAA transformation agenda

Established empowerment programmes include:•Executive Development Programme•Supervisory Training•Leadership Development•Functional courses•Legislative courses•ABET•Airline Contact Center Management •Airfreight Handling•Supply Chain Management

The presentation will however only speak to the establishment

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Transformation - SAA

Pilots: 2002 June 2004 Plan 2005 July 2006- PDI 4%(32) 7%(53) 7% (57) 9%(68)- White Females 1%(12) 3%(27) 2% (15) 4%(36)- White Males 95%(728) 90%(729) 90% (693) 87%(700)- TOTAL 772 809 765 802

Total Employees: 2002 June 2004 Plan 2005 July 2006- PDI 66%(4055) 70%(4250) 68% (4029)

72%(4083)- White Females 19%(1173) 17%(1065) 18% (1167)

16%(908)- White Males 14%(889) 12%(745) 14% (878) 12%(687)- TOTAL 6117 6060 6074 5678

(NB: These figures exclude Technical and Pilots)

Management: 2002 June 2004 Plan 2005 July 2006- PDI 44%(202) 51%(250) 51% (274) 53%(289)- White Females 24%(108) 21%(103) 20% (108)

18%(99)- White Males 32%(147) 28%(141) 29% (154) 29%(165)- TOTAL 457 494 536 553(NB: These figures exclude Technical and Pilots)

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Transformation - SAA

TotalM F M F M F M F M F M F

EXCO 1 5 3 6 3 2 8 3 11 Total % 9 - 45 27 - - 55 27 18 - 73 27 100

Total 9 2 27 17 3 3 39 22 21 12 60 34 94

Total % 10 2 29 18 3 3 41 23 22 13 64 36 100

Level 3

Total 22 23 73 58 19 24 114 105 142 87 256 192 448

Total % 5 5 16 13 4 5 25 23 32 19 57 43 100

Total management

Total 32 25 105 78 22 27 159 130 165 99 324 229 553

Total % 6 5 19 14 4 5 29 24 30 18 59 41 100

Junior Personnel

Junior Personnel 159 257 1,092 1,487 351 514 1,602 2,258 1,222 845 2,824 3,103 5,927 Total % 3 4 18 25 6 9 27 38 21 14 48 52 100

Pilots

14 3 29 - 18 2 61 5 700 36 761 41 802

Total % 2 0 4 - 2 0 8 1 87 4 95 5 100

Total 205 285 1,226 1,565 391 543 1,822 2,393 2,087 980 3,909 3,373 7,282 Total % 3 4 17 21 5 7 25 33 29 13 54 46 100

Total Excluding Pilots 191 282 1,197 1,565 373 541 1,761 2,388 1,387 944 3,148 3,332 6,480

Total % 3 4 18 24 6 8 27 37 21 15 49 51 100

Level 2 (*Excluding EXCO members)

1. Permanent Employees - SAATotal Employees by race and gender per Salary Grouping as at July 2006

Asian (A) Black (B) Coloured (C) Total (A+B+C) White Total

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Transformation - SAA

Management - 2002

DesignatedGr oups

44%

White Females24%

White Males32%

Management - June 2004

White Males28%

White Females21%

DesignatedGroups

51%

Management - July 2006

DesignatedGroups

53%White Females18%

White Males29%

Management 2002 June 2004 July 2006- Designated Groups 44% 51% 53%- White Females 24% 21% 18%- White Males 32% 28% 29%

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Transformation - Transnet• Transnet has embarked on a turnaround strategy focusing on

improving efficiencies, reducing costs and adding value to customers and shareholders

• The goal is to build a focused freight transport company, streamlining activities into freight rail, ports and pipeline

• As such EE data is presented as at 30th June 2006 for the core business units only namely:

– Spoornet– Preferential Port Operations– National Ports Authority– Protekon– Petronet– Corporate Centre (including Transnet Foundation, Esselenpark and Transtel SS)

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Transformation - Transnet

EEA2 Reports as @ Jun 06 Male Female  

    African Coloured Indian White African Coloured Indian White Total 

Top & Senior Management 104 26 46 124 54 4 14 32 404

Professionals 147 42 70 310 91 25 22 38 745Skilled Technical 626 208 182 1507 337 89 56 131 3136

Semi Skilled 15778 7356 992 6342 3444 620 236 1230 35998

Unskilled 6518 645 30 116 307 70 13 134 7833

GRAND TOTAL 48 116

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Transformation - Transnet• Transnet Board (14 directors):

– 50% black persons (6 African, 1 Indian)– 57% black females (3 African, 1 Indian)– No PLWD– Substantial progress has been made with representation of black persons whilst the black

female target has already been reached

• Charter: 5 year target (2009) for Top & Senior Management– 70% black persons– 35% (50% of black persons target) black females– 3% all people living with disabilities (PLWD)

• Transnet Top & Senior Management (404):– 61% black persons (158 African, 30 Coloured,60 Indian)– 29% black females (54 African, 4 Coloured, 14 Indian)– Information on PLWD specific to top/ senior management not available– Current transport sector achievement: 27% black persons of which 20% female– Charter targets not met yet BUT Transnet is very close to achieving the targets for black

persons and black females; Transnet is ahead of current sector achievement

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Transformation - Transnet

• The Transnet Group has a total of 48 116 employees of which:– 79.29% are black persons (6825 African, 715 Coloured, 43 Indian)– 14.10% are black females (307 African, 70 Coloured, 13 Indian)– 0.22% are PLWD

• Transnet is already beyond the overall 2009 target for black persons but progress in relation to black females and PLWD is slow

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Transformation - Transnet

• Professionals: 53.28% black persons and 18.52% black females

• Skilled: 47.77% black persons and 15.37% black females

• Semi-skilled: 78.95% black persons and 11.95% black females

• Unskilled: 96.81% black persons and 4.98% black females

• Current Transport Sector achievement for professional & skilled employees is 50% black persons and 27% black females

• Transnet is making good progress regarding black persons across all levels but progress regarding black females across all levels is slow

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Empowerment programmes - Transnet

• Charter sets an ongoing target of:– At least 10% of payroll expended on skills development initiatives

(includes 1% skills levy); 50% of 10% targeted at training of youth– At least 5% of workforce increase in learnerships in 3 years

• Transnet achievement is not reported with reference to the target

• The Group has trained an average of 73.3% black employees

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Empowerment programmes - Transnet

Transnet Executive Women Development Programme & leadership programmes at three levels namely:

• Transnet Executive Development Programme

• Transnet Business Driven Action Learning programme (GIBS)

• Transnet Management Development Programme (Wits )

• Transnet Emerging Leadership Programme (through Esselenpark & UNISA)

• 43 % of women at all management levels have participated in the leadership programmes over the last 18 months.

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Empowerment programmes - Transnet

Business Unit Number trained % BlackPetronet 281 65

Spoornet 25 797 training courses 72.5

NPA (Head Office) 97 78

SAPO (Head Office) 82 78

The statistics below are based on the 2005/6 reporting timeframes:

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Preferential procurement - Transnet• Preferential Procurement:

– 5 year target (2009)• 60% of discretionary spend to black owned and empowerment

enterprises• 30% SMME (incl. Black owned & empowerment enterprises

• Based on available information the total BEE spend is 42%

• Based on available information it appears that progress with attainment of the SMME target is slow

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Preferential procurement - Transnet

728,370

Unavailable

Unavailable

Unavailable

Unavailable

Unavailable

728,370

SMME value(all races)

3,243,046,617

184,350,000

714,000,000

51,905,942

309,294,675

1,178,496,000

805,000,000

Total BEE value

42%

31%

31%

34%

51%

48%

53%

Total BEE %

83,741,26411,822,482,157NA7,659,686,858Totals

Unavailable976,243,000590,814,000590,814,000 Protekon

59,000,0002,316,000,000N/A2,316,000,000Transwerk

Unavailable1,077,406,157153,168,854153,168,854Petronet

24,687,044901,993,000611,224,004611,224,004SAPO

N/A2,455,200,0002,755,000,0002,455,200,000NPA

54,2204,095,640,0001,533,280,000 1,533,280,000Spoornet

WBE valueTotal Procured value

Available discretionary

spend

Procurement Spend

728,370

Unavailable

Unavailable

Unavailable

Unavailable

Unavailable

728,370

SMME value(all races)

3,243,046,617

184,350,000

714,000,000

51,905,942

309,294,675

1,178,496,000

805,000,000

Total BEE value

42%

31%

31%

34%

51%

48%

53%

Total BEE %

83,741,26411,822,482,157NA7,659,686,858Totals

Unavailable976,243,000590,814,000590,814,000 Protekon

59,000,0002,316,000,000N/A2,316,000,000Transwerk

Unavailable1,077,406,157153,168,854153,168,854Petronet

24,687,044901,993,000611,224,004611,224,004SAPO

N/A2,455,200,0002,755,000,0002,455,200,000NPA

54,2204,095,640,0001,533,280,000 1,533,280,000Spoornet

WBE valueTotal Procured value

Available discretionary

spend

Procurement Spend

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Conclusion - Transnet• Black Persons: Transnet has made substantial progress in achieving the 70% black persons

Management and Employment Equity (EE) target; at all staff levels Transnet has already gone beyond the target

• Gender: Whilst substantial progress has been made in relation to the number of black females on the Board of Directors and Top/ Senior Management, EE for black females across all levels has not kept pace with the employment of black males

• Demographic representation: Transnet has generally made progress with its alignment to demographic representation but imbalances still exist –this should improve as Transnet proceeds to attain its BEE targets

• PLWD: Transnet has made slow progress in achieving the 3% target

• Skills development: Whilst Transnet has made substantial progress with the training of black employees, its reporting format has to be aligned with the Charter target

• Preferential procurement: Whilst some progress has been made regarding the total BEE spend, progress with SMME spend seems to be slow; reporting on preferential procurement should improve and be aligned to Charter target

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Way forward - Transnet

• Focus on the core business units in line with the “one company, one vision philosophy”

• Develop an overarching Employment Equity (EE) strategy to ensure consistency in approach, principles and implementation

• Develop a consolidated EE plan that will form the basis for the EE plans of all operating divisions

• Develop a group wide EE monitoring tool and score card to assess implementation and monitor accountability

• Completion of group wide strategy, EE plans and targets, by March 2007